FL 1998
Home
Union
Stewards
Union
Membership
NFFE 
National
IAMAW AFL-CIO Union
Websites
  Overtime Pay: FLSA Exempt vs. Non-Exempt
Settlement of FLSA Grievance Filed by NFFE Local 1998 Nets Passport Employees a Total of $306,401.09
NFFE Local 1998 – expertly represented by Attorney Michael Snider – filed a grievance on April 20, 2004 challenging the classification of bargaining unit employees as Exempt from the Fair Labor Standards Act (FLSA). In a nutshell, their classification as Exempt meant that employees who worked overtime were capped at the GS-10, Step 1 rate of pay. Management agreed to correct the FLSA status of employees to Non-Exempt on August 28, 2004, retroactive to April 20, 2002. This means that employees will now be receiving true time and one-half pay for overtime work. The grievance was finally settled on February 11, 2005.  The Grievance resulted in backpay for employees totaling $306,401.09, which was paid by the end of May 2005. This amount includes the payments for underpaid overtime, liquidated damages, interest, suffered and permitted overtime, and compensatory time. This greatly exceeds any previous financial benefit achieved by Local 1998 on behalf of Passport Services bargaining unit employees. In the long run, the amount of money paid to employees for true time and one-half for overtime work, due to the correction of their FLSA classifications from Exempt to Non-Exempt, will far exceed this settlement amount.

Colin Walle & Attorney Michael Snider sign the Settlement Agreement for Local 1998

Links


Explanation

FLSA Status In Process of Being Corrected: True Time-and-One-Half Pay for OT
June 28, 2004: Some employees have started to receive SF-50 Notification of Personnel Actions correcting their Fair Labor Standards Act (FLSA) status from “E” to “N”.  This means that their status is being changed from exempt from the FLSA to non-exempt from the FLSA, so that the FLSA does apply to them.  This is the result of the Grievance between the parties that the Union filed on April 22, 2004.

Note: the information below contains the Union’s opinion on this subject, and should not be misconstrued as a final and official decision or agreement.  The Union is still working out details with Management, and some other issues (e.g., compensation for “suffered and permitted” overtime) are still unresolved so their inclusion here does not imply that Management agrees with the Union’s interpretation of the law.    

The Union filed a grievance on April 22, 2004 that argued that bargaining unit employees in Passport Services were misclassified as exempt from the Fair Labor Standards Act (FLSA).  Click here to read the grievance: FLSA Exempt Grievance.  By virtue of this misclassification, many employees (all GS-11 employees and some GS-9 employees) were limited to overtime pay at the rate of time-and-one-half of the GS-10, Step 1 rate.  The Union believes that the employees should properly be classified as “FLSA Non-Exempt”, which means they would be entitled to true time-and-one-half overtime pay, among other things.  Click here to find your hourly rate of pay: 2004 Pay Schedule with Locality Scales

While details are still being worked out between the Union and Management, Management has agreed to correct the FLSA status of bargaining unit employees from “FLSA Exempt” to “FLSA Non-Exempt”.  This change will be reflected in SF-50 Notification of Personnel Action forms, which will change item number 35 (FLSA Category) from “E” to “N”.  Under item number 45 (Remarks) the explanation should show that “this action is being processed retroactively due to a grievance filed by NFFE Local 1998 in April 2004”.   

Please note that FLSA classification is not the same thing as bargaining unit classification, job classification, or grade (GS level) classification.   

This change will monetarily benefit:

  • Current GS-11’s and some GS-9’s (those at the Step 5 level or higher who earn more than the GS-10, Step 1 rate) who have worked or will work overtime. 
  • Current employees whose rate of pay is lower than the GS-10, Step 1, but who will be promoted in the future (e.g., employees on the GS-5/7/9/11 track).
  • Future employees, or employees who are not on the GS-5/7/9/11 track but who are selected for such a position in the future.

Employees will benefit in the following ways:

  • Future overtime will be calculated at true time-and-one-half pay.  Examples:
    • A GS-11, Step 5 Passport Specialist in Seattle is currently paid $27.59 for his/her regular hourly rate, but receives only $33.24 for one hour of overtime.  After the employee’s status is corrected from “E” to “N”, he/she shall be paid overtime at the rate of $41.39 per hour (an increase of $8.13 per hour). 
    • A GS-11, Step 1 Passport Specialist in Los Angeles is currently paid $25.39 for his/her regular hourly rate, but receives only $34.67 for one hour of overtime.  After the employee’s status is corrected from “E” to “N”, he/she shall be paid overtime at the rate of $38.09 per hour (an increase of $3.42 per hour). 
    • A GS-11, Step 8 Passport Specialist in Portsmouth, NH is currently paid $30.51 for his /her regular hourly rate, but receives only $33.78 for one hour of overtime.  After the employee’s status is corrected from “E” to “N”, he/she shall be paid overtime at the rate of $45.77 per hour (an increase of $11.99 per hour). 
  • Past overtime performed during the time of the misclassification will be compensated in the form of “liquidated damages” (double damages).  This will cover the time period for the last two to three years prior to the April 22, 2004 (the date of the grievance), and also the time period after the grievance was filed until the exemption status is corrected.  The issue of whether that retroactive pay will be for two years or three years is still being decided.  Using the examples above, this would have the following effect:
    • If the GS-11, Step 5 employee in Seattle worked 5 hours of overtime this year prior to the classification correction, then he/she would receive: 5 x $8.13 x 2 = $81.30, before taxes. 
    • If the GS-11, Step 1 employee in Los Angeles worked 50 hours of overtime this year prior to the classification correction, then he/she would receive 50 x $3.42 x 2 = $342.00, before taxes. 
    • If the GS-11, Step 8 employee in Portsmouth, NH worked 100 hours of overtime this year prior to the classification correction, then he/she would receive: 100 x $11.99 x 2 = $2398.00, before taxes. 
  • Compensatory time (AKA “comp time”): the Union believes that this classification correction will allow employees the choice on whether to take comp time or pay for overtime work, rather than that choice being made at Management’s discretion. 
  • Overtime differential for comp time: the Union believes that this classification correction will also benefit employees who have used comp time in the past, and that they should receive the liquidated damages as if they had been paid.  Using the Seattle example above, if that employee had worked 5 hours of overtime and had received 5 hours of comp time as a result, the Union believes that he/she should receive $81.30. 
  • “Suffered and permitted” overtime: based on information received from employees, the Union believes that the practice of working without compensation (working through lunch or starting early/leaving late) is widespread, and that employees should be compensated for this work. 

Note: the information above contains the Union’s opinion on this subject, and should not be misconstrued as a final and official decision or agreement.  The Union is still working out details with Management, and some other issues (e.g., compensation for “suffered and permitted” overtime) are still unresolved so their inclusion here does not imply that Management agrees with the Union’s interpretation of the law.    


News Stories


Local 1998's FLSA Settlement was featured in the Summer 2005 issue of NFFE's "The Federal Employee" newsletter

FLSA Settlement Total: $306,401.09
May 26, 2005: The Grievance filed by the Union and Attorney Michael Snider on April 20, 2004 has resulted in payments totaling $306,401.09 to employees. This amount includes the payments for underpaid overtime, liquidated damages, interest, suffered and permitted overtime, and compensatory time. This greatly exceeds any previous financial benefit achieved by Local 1998 on behalf of Passport Services bargaining unit employees. In the long run, the amount of money paid to employees for true time and one-half for overtime work, due to the correction of their FLSA classifications from Exempt to Non-Exempt, will far exceed this settlement amount.

FLSA Settlement Deadline for Claim Forms

April 26, 2005: Today is the deadline to submit claims forms for "suffered and permitted" overtime and forced compensatory time. Over 400 bargaining unit employees submitted claim forms, each worth $250.


$170,000 and Counting ...
March 8, 2005: The total payments for backpay, liquidated damages, and interest to employees who were underpaid for overtime totaled over $170,000. These payments were made to the employees by Management as a result of the April 20, 2004 Grievance by the Union challenging the FLSA status of employees. These payments do not include the monies that will be received by employees for suffered and permitted overtime or for forced compensatory time, which will be paid by the end of May 2005.


Colin Walle & Attorney Michael Snider sign the Settlement Agreement for Local 1998

FLSA Grievance Finally Settled!
Huge Benefit for PPT Employees!
February 11, 2005: The Grievance filed by the Union, represented by Attorney Michael Snider, on April 20, 2004 to correct the FLSA (Fair Labor Standards Act) status of unit employees was finally settled. Attorney Snider, along with President Colin Walle, signed for the Union, and Frank Moss and Linda Tagliatela signed for the Department of State. This grievance has resulted in the largest financial benefit ever achieved by Local 1998 on behalf of the employees it represents in the 24 year history of the local (as far as can be determined). As part of the settlement, employees were already reclassified as Non-Exempt from the FLSA on August 28, 2004. This means that employees will no longer be artificially capped at the GS-10, Step 1 rate of pay for overtime work, but will instead receive true time-and-one-half their pay. Back pay with liquidated (double) damages plus interest, along with compensation for suffered and permitted overtime, and compensatory time earned between April 20, 2002 and August 28, 2004, will start to be paid shortly.
Click here for Settlement Agreement and additional FLSA information

Union Files Grievance Over Holiday Admin Leave Debacle
January 20, 2005: The Union filed a Grievance Between the Parties concerning the changes from past practice, inequitable treatment, and retaliation for the FLSA grievance, that occurred with Administrative leave on December 23, 2004.

Click here for Grievance

FLSA Settlement Discussions Continue
July 26, 2004: The Union and Management continue to discuss the details of a settlement of the Union's grievance.  The Union is being well represented by an attorney, Michel J. Snider, Esq., who is experienced in handling FLSA grievances and other federal labor issues.  Click on the link below for more information on Mr. Snider's practice.


 

FLSA Status In Process of Being Corrected: True Time-and-One-Half Pay for OT
June 30, 2004: Some employees have started to receive SF-50 Notification of Personnel Actions correcting their Fair Labor Standards Act (FLSA) status from “E” to “N”.  This means that their status is being changed from exempt from the FLSA to non-exempt from the FLSA, so that the FLSA does apply to them.  This is the result of the Grievance between the parties that the Union filed on April 22, 2004. 

Grievance Filed Over FLSA OT Misclassification
April 22, 2004: The Union believes that the bargaining unit employees have been misclassified as exempt from the Fair Labor Standards Act (FLSA), which has limited them to time-and-one-half of the GS-10, Step
1 overtime rate. 
FLSA Exempt Grievance